FSL Chain Mail (14th September 2021)
FSL’s Chain Mail is a regular blog containing links to news articles that we think are worth sharing.
Last week, the new Health and Social Care Bill passed through parliament. It plans to raise £12bn in annual income that will be ringfenced to pay for health and social care. The additional funds will be gained through a 1.25% increase to national insurance contributions and an increase of 1.25 percentage points to dividend tax rates. The increase will come into force across the UK from April 2022. This edition of Chain Mail assesses the impact the proposed tax changes may have on individuals, investors and businesses.
The Guardian reported that business groups “reacted with dismay” to the government’s proposed tax increases, with the business community calling it a “tax on jobs and a blow to the economic recovery”. Similarly, Chris Flood of the Financial Times described the dividend tax rise as a “kick in the teeth for investors”. Furthermore, Emma Agyemang of the Financial Times explores the “winners and losers” from the £12bn social care tax raid.
The Evening Standard speak with Rowena Howie, of the Federation of Small Business and investigate the impact the increases in tax may have on small business. Additionally, an article from Investment Week provides the latest reactions to the dividend tax hikes, from the Investment Management industry.
Lastly, City AM describes how the tax changes may damage the City of London’s reputation, as a “good place to do business” and looks at the longer-term implications, this may have.
It is worth noting that dividends are not ‘earnings’ for National Insurance purposes, so there is no prospect of a ‘double whammy’ on dividend income as a result of this Health and Social Care Plan.
Look out for our next edition with more FSL Chain Mail links.